Oil Rig Watchdog Faulted for Lax Oversight

It seems the federal agency charged with regulating offshore oil drilling in the U.S. hasn’t been doing much of it. According to a report in The Wall Street Journal, the Minerals Management Service (MMS) only sets broad performance goals for the industry. Over the past decade, drillers and oil producers have been free to decide for themselves how to meet those goals.

MMS has a joint mission that creates conflicts of interest, critics charge. On one hand, it’s supposed to be an industry watchdog. But on the other, the agency is also charged with promoting energy independence and generating government revenue from drilling on government lands. What’s more, half of the MMS budget comes from the oil industry in the form of fees and rental receipts. Former and current MMS officials told the Journal that because of this, the agency has put an emphasis on collecting fees in recent years.

Whether better oversight on the part of MMS could have prevented last month’s Deepwater Horizon oil rig explosion that killed 11 and spawned a massive oil spill that threatens much of the Gulf Coast remains to be seen. But according to the Journal, oil wells in the U.S. have been more likely to go out of control in recent years that those in countries with stricter oversight. According to the International Regulators’ Forum, a group of offshore regulatory bodies, the U.S. reported five major “loss of well control” incidents in 2007 and 2008. Five other countries – U.K., Norway, Australia, Canada and the Netherlands – had no such incidents.

It’s also more dangerous for workers in the U.S. offshore drilling industry than it is for their counterparts elsewhere, the Journal said. Over the past five years, an offshore oil worker in the U.S. was more than four times as likely to be killed than a worker in Europe. U.S. oil workers were also 23 percent more likely to be injured.

At the same time, the Journal found that the number of rigs inspected by MMS has fallen significantly in recent years, from 1,292 in 2005 to 760 by 2009.

The Wall Street Journal’s investigation also found several instances of MMS identifying potential safety problems and then either not requiring follow-up or relying on the industry to craft a solution. Not surprisingly, the industry didn’t always follow through, the Journal said.